Chanticleer dropped by 46%

[roughlyright]

Chanticleer which is followed by some board members has fallen by 46% today. I have seen the news that, they are raising more money in a secondary offering. Anyboday has more insights on this company?

[Parsad]

Chanticleer which is followed by some board members has fallen by 46% today. I have seen the news that, they are raising more money in a secondary offering. Anyboday has more insights on this company?

 

Only about 2,600 shares traded hands...it's pretty illiquid still.  Once the new shares are issued, you will probably start to see a little more consistency in pricing.  They are raising $11M to pay down debt and fund the expansion of Hooters Restaurants internationally.  Go to their website and they have a ton of information...www.chanticleerholdings.com. 

 

Mike, Joe, & Matt, have a good time ringing the Nasdaq bell on the 26th!  I'll be watching the live feed.  You guys have done a ton of work to turn this thing around over the last four years, and it's all up from here!  Cheers!

 

http://finance.yahoo.com/news/chanticleer-holdings-ring-nasdaq-closing-165500089.html

[Hawk4value]

FYI:

 

Israel A. Englander thru his ICS Opportunities Fund, which he manages thru Millennium Management, holds approx 11% of Chanticleer:  222,222 common shares and 222,222 warrants, which can be exercised at $5/share. Probably participated in the recent $11mil capital raise.

[Guest hellsten]

Chanticleer which is followed by some board members has fallen by 46% today. I have seen the news that, they are raising more money in a secondary offering. Anyboday has more insights on this company?

 

A bit late, but here are a few documents and links:

http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/chanticleer-holdings/30/

http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/congratulations-to-chanticleer!/

http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/chanticleer-holdings-puts-hooters-deal-on-hold/

http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/chanticleer-holdings-947/10/

 

http://content.stockpr.com/chanticleerholdings/media/2d1acd72ac82097139bfde1c64a7b908.pdf

http://ir.stockpr.com/chanticleerholdings/all-sec-filings/content/0001144204-12-029150/0001144204-12-029150.pdf

http://www.sec.gov/Archives/edgar/data/1106838/000114420412035741/v316601_424b4.htm

 

http://www.chanticleerinvestmentpartners.com/files/2012/02/1-Introduction.pdf

http://www.scribd.com/doc/95454214/Chanticleer-Advisors-The-Case-for-Small-amp-Micro-Cap-Value-Investing-April-2012-Final

http://www.chanticleeradvisors.com/files/107293/the%20manual%20of%20ideas%20-%20chanticleer%20interview.pdf

http://www.valueinvestingworld.com/2012/06/chanticleer-holdings-inc.html

 

http://www.fundinguniverse.com/company-histories/hooters-of-america-inc-history/

http://www.bizjournals.com/charlotte/print-edition/2012/07/06/chanticleer-offering-key-to-hooters.html

 

From what I understand, HOTR/HOTRU/Chanticleer is a bet on the international expansion of Hooters. It's also a bet on the Chanticleer team.

 

By the way, would someone smarter than me be so kind as to explain the difference between HOTRU and HOTR? I understand that one Chanticleer Holdings Unit (HOTRU) gives you one stock and one warrant. This doesn't sound too bad to me. You get the option of buying more of an illiquid stock. The price of HOTRU and HOTR is about the same, so you get the warrant for almost nothing. Maybe because Chanticleer wanted to make sure that the offering was successful, or am I missing something?

[Parsad]

Chanticleer which is followed by some board members has fallen by 46% today. I have seen the news that, they are raising more money in a secondary offering. Anyboday has more insights on this company?

 

A bit late, but here are a few documents and links:

http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/chanticleer-holdings/30/

http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/congratulations-to-chanticleer!/

http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/chanticleer-holdings-puts-hooters-deal-on-hold/

http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/chanticleer-holdings-947/10/

 

http://content.stockpr.com/chanticleerholdings/media/2d1acd72ac82097139bfde1c64a7b908.pdf

http://ir.stockpr.com/chanticleerholdings/all-sec-filings/content/0001144204-12-029150/0001144204-12-029150.pdf

http://www.sec.gov/Archives/edgar/data/1106838/000114420412035741/v316601_424b4.htm

 

http://www.chanticleerinvestmentpartners.com/files/2012/02/1-Introduction.pdf

http://www.scribd.com/doc/95454214/Chanticleer-Advisors-The-Case-for-Small-amp-Micro-Cap-Value-Investing-April-2012-Final

http://www.chanticleeradvisors.com/files/107293/the%20manual%20of%20ideas%20-%20chanticleer%20interview.pdf

http://www.valueinvestingworld.com/2012/06/chanticleer-holdings-inc.html

 

http://www.fundinguniverse.com/company-histories/hooters-of-america-inc-history/

http://www.bizjournals.com/charlotte/print-edition/2012/07/06/chanticleer-offering-key-to-hooters.html

 

From what I understand, HOTR/HOTRU/Chanticleer is a bet on the international expansion of Hooters. It's also a bet on the Chanticleer team.

 

By the way, would someone smarter than me be so kind as to explain the difference between HOTRU and HOTR? I understand that one Chanticleer Holdings Unit (HOTRU) gives you one stock and one warrant. This doesn't sound too bad to me. You get the option of buying more of an illiquid stock. The price of HOTRU and HOTR is about the same, so you get the warrant for almost nothing. Maybe because Chanticleer wanted to make sure that the offering was successful, or am I missing something?

 

Hi Hellsten,

 

I think you have it right for the most part.  As for HOTRU and HOTR, I don't think they wanted them to trade at par, but they expect the markets to arbitrage the difference.  Unfortunately, to this point, the markets aren't giving any difference in value to HOTRU...nominal at best.  Cheers! 

[ragnarisapirate]

Chanticleer which is followed by some board members has fallen by 46% today. I have seen the news that, they are raising more money in a secondary offering. Anyboday has more insights on this company?

 

A bit late, but here are a few documents and links:

http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/chanticleer-holdings/30/

http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/congratulations-to-chanticleer!/

http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/chanticleer-holdings-puts-hooters-deal-on-hold/

http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/chanticleer-holdings-947/10/

 

http://content.stockpr.com/chanticleerholdings/media/2d1acd72ac82097139bfde1c64a7b908.pdf

http://ir.stockpr.com/chanticleerholdings/all-sec-filings/content/0001144204-12-029150/0001144204-12-029150.pdf

http://www.sec.gov/Archives/edgar/data/1106838/000114420412035741/v316601_424b4.htm

 

http://www.chanticleerinvestmentpartners.com/files/2012/02/1-Introduction.pdf

http://www.scribd.com/doc/95454214/Chanticleer-Advisors-The-Case-for-Small-amp-Micro-Cap-Value-Investing-April-2012-Final

http://www.chanticleeradvisors.com/files/107293/the%20manual%20of%20ideas%20-%20chanticleer%20interview.pdf

http://www.valueinvestingworld.com/2012/06/chanticleer-holdings-inc.html

 

http://www.fundinguniverse.com/company-histories/hooters-of-america-inc-history/

http://www.bizjournals.com/charlotte/print-edition/2012/07/06/chanticleer-offering-key-to-hooters.html

 

From what I understand, HOTR/HOTRU/Chanticleer is a bet on the international expansion of Hooters. It's also a bet on the Chanticleer team.

 

By the way, would someone smarter than me be so kind as to explain the difference between HOTRU and HOTR? I understand that one Chanticleer Holdings Unit (HOTRU) gives you one stock and one warrant. This doesn't sound too bad to me. You get the option of buying more of an illiquid stock. The price of HOTRU and HOTR is about the same, so you get the warrant for almost nothing. Maybe because Chanticleer wanted to make sure that the offering was successful, or am I missing something?

 

Hi Hellsten,

 

I think you have it right for the most part.  As for HOTRU and HOTR, I don't think they wanted them to trade at par, but they expect the markets to arbitrage the difference.  Unfortunately, to this point, the markets aren't giving any difference in value to HOTRU...nominal at best.  Cheers!

 

Right. As of today, you are basically paying 30 cents for a warrant that you have 5 years to exercise at $5 bucks. This is alone tempting; especially since the company raised a ton of cash in the offering.

 

As I read it all this correctly, if the warrants all exercise in 5 years, there will be roughly 8.6 million shares out (compared to 3.7 million). This means there is basically a touch more than a buck a share in cash- more if they dont get above $5 bucks, but then you lose your 30 cents a share premium... As such, this isn't really being valued as a liquidation thing, but as you say, a bet on their international ops... in light of that, I am not really drawn in.

 

thoughts?

[OracleofCarolina]

Well, at least this was caught early...one of the guys in South Africa

misappropriated approximately $128,000 of cash and paid back $40,000 already.

http://finance.yahoo.com/news/chanticleer-holdings-completes-audit-south-211603250.html

 

 

[Ballinvarosig Investors]

That is worse than what I expected. If it was just a bone-headed accounting error, then perhaps you could forgive management. The fact that Chanticleer did business with someone who subsequently robbed from the company is pretty damning.

[twacowfca]

Chanticleer which is followed by some board members has fallen by 46% today. I have seen the news that, they are raising more money in a secondary offering. Anyboday has more insights on this company?

 

A bit late, but here are a few documents and links:

http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/chanticleer-holdings/30/

http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/congratulations-to-chanticleer!/

http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/chanticleer-holdings-puts-hooters-deal-on-hold/

http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/chanticleer-holdings-947/10/

 

http://content.stockpr.com/chanticleerholdings/media/2d1acd72ac82097139bfde1c64a7b908.pdf

http://ir.stockpr.com/chanticleerholdings/all-sec-filings/content/0001144204-12-029150/0001144204-12-029150.pdf

http://www.sec.gov/Archives/edgar/data/1106838/000114420412035741/v316601_424b4.htm

 

http://www.chanticleerinvestmentpartners.com/files/2012/02/1-Introduction.pdf

http://www.scribd.com/doc/95454214/Chanticleer-Advisors-The-Case-for-Small-amp-Micro-Cap-Value-Investing-April-2012-Final

http://www.chanticleeradvisors.com/files/107293/the%20manual%20of%20ideas%20-%20chanticleer%20interview.pdf

http://www.valueinvestingworld.com/2012/06/chanticleer-holdings-inc.html

 

http://www.fundinguniverse.com/company-histories/hooters-of-america-inc-history/

http://www.bizjournals.com/charlotte/print-edition/2012/07/06/chanticleer-offering-key-to-hooters.html

 

From what I understand, HOTR/HOTRU/Chanticleer is a bet on the international expansion of Hooters. It's also a bet on the Chanticleer team.

 

By the way, would someone smarter than me be so kind as to explain the difference between HOTRU and HOTR? I understand that one Chanticleer Holdings Unit (HOTRU) gives you one stock and one warrant. This doesn't sound too bad to me. You get the option of buying more of an illiquid stock. The price of HOTRU and HOTR is about the same, so you get the warrant for almost nothing. Maybe because Chanticleer wanted to make sure that the offering was successful, or am I missing something?

 

Hi Hellsten,

 

I think you have it right for the most part.  As for HOTRU and HOTR, I don't think they wanted them to trade at par, but they expect the markets to arbitrage the difference.  Unfortunately, to this point, the markets aren't giving any difference in value to HOTRU...nominal at best.  Cheers!

 

Right. As of today, you are basically paying 30 cents for a warrant that you have 5 years to exercise at $5 bucks. This is alone tempting; especially since the company raised a ton of cash in the offering.

 

As I read it all this correctly, if the warrants all exercise in 5 years, there will be roughly 8.6 million shares out (compared to 3.7 million). This means there is basically a touch more than a buck a share in cash- more if they dont get above $5 bucks, but then you lose your 30 cents a share premium... As such, this isn't really being valued as a liquidation thing, but as you say, a bet on their international ops... in light of that, I am not really drawn in.

 

thoughts?

 

It's tough to make money in a competitive business like restaurants unless what you offer is superior.  I have a friend who is president of one of the top fast food chains. 99.9% of their units succeed in the US.  It was tough for them succeed in S. Africa, and their affiliate there closed down a few years ago. 

[Parsad]

That is worse than what I expected. If it was just a bone-headed accounting error, then perhaps you could forgive management. The fact that Chanticleer did business with someone who subsequently robbed from the company is pretty damning.

 

Actually, that could happen to anyone, so I'm relieved with the amount misappropriated and that they caught it.  Even Buffett was fooled by Sokol after all the great things Sokol did at Berkshire. 

 

I'm still wondering how the heck did head office, including the CFO and audit committee, not realize that the audited numbers provided from South Africa had not actually been audited before filing 2011's 10-K, as well as 1st and 2nd quarter 10-Q's.  Didn't anyone at head office actually talk to the South African auditors, even in a cordial call to see how the audit process went, and ask any questions?  I expect that internal control issues have already been evaluated and remediated.  They are just lucky it wasn't $1M or more that was stolen.  Cheers!

 

[Parsad]

1st quarter 10-Q filed and they expect 2nd Q and 3rd Q to be filed before month end.  No word from Nasdaq when trading can resume, but I would think it won't take that long after 3rd Q is filed.  Cheers!

 

http://finance.yahoo.com/news/chanticleer-holdings-announces-revised-first-192320586.html

[Parsad]

2nd quarter restatement filed.  Cheers!

 

http://ir.stockpr.com/chanticleerholdings/company-news/detail/413

[rkbabang]

And the 3rd qrtr results.  Hopefully they'll be trading again soon.

 

Chanticleer Holdings Announces Third Quarter 2012 Financial Results

[rkbabang]

Trading again!

[motownsf]

What are realistic sales and EBITDA margins like for international Hooters restaurants compared to what the US concepts might be?

 

I imagine EBITDA margins are lower than BWLD right now as Hooters was a struggling concept and HIG typically buys semi-turnarounds out of their buyout funds.

 

BWLD has roughly 15% EBITDA margins. If Hooters has 10% EBITDA margins and does $2.3m per store roughly in the US, the average US store does $230k in EBITDA.

 

I doubt the concept does the volume it does in the US because, while the emerging markets growth story is hot and sounds great, the average person in Africa and Brazil has much less disposable income to spend on wings and beer. They will need to grow the store count a lot going forward and one must believe in the growth story.